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There's Still No Agreement On Ad Insertion

9-17-13

Setting aside, for a moment, the fact that broadcasters have yet to find an industry-wide solution to seamlessly play music and commercials online, they are also far from an agreement on whether or not inserting ads into their streams is worth their time. Internet pure play companies will, of course, tell you its worth every minute of their time because they can target ads, and, because it's their bread and butter. It's their primary source of ad revenue, unlike radio which already has an abundance of over-the-air inventory.

Vendors that provide the technology will tell you radio is missing a real opportunity to make money when they choose not to insert ads. Yesterday, at the RAIN conference in Orlando, it was clear broadcasters are still hesitant to spend money and time on a technology that produces very little return.

Saga Communications has been very outspoken about walking away from ad-insertion. Executive Vice President Steve Goldstein said Saga spent a lot of time discussing it and found monetizing it wasn't easy. "It was difficult. One funeral home in Milwaukee was on during every break. Smokey The Bear commercials is not the way to go." Goldstein said it also became an issue in the traffic department so there were a number of issues that caused Saga to question the effort. "People were telling us they now have a computer at the office, not a radio. We wanted to give them the total radio listening experience."

Greater Media's Tom Bender said at the moment his company is using ad insertion but they are also using a lighter commercial load and filling with music "to create a better expereince for the online listener." That of course begs the question, why does the over-the-air listener have to tolerate heavier spot loads and the online listener doesn't?

Triton's Mike Agovino said that, other than Clear Channel, the rest of the broadcast industry has not monetized digital. "At RAIN #20 there shouldn't be such a panel. It's insanity to me. Your ability to know abot the end user is at your fingertips." He said pure play broadcasters are monetizing digital at a much better rate because they know more about their audience.

Natalie Swed Stone, who is the US Director for National Audio at OMD, questioned Agovino's statement that the panel was insanity. "I don't understand why you say we shouldn't have this panel. We're talking about how pure play continues to win." She went on to say that what used to be one budget for an 18-49 demo has morphed into a request to take that same budget and apply it to eight different segments -- that can now be targeted using online audio -- in that same 18-49 demo.

Saga's Steve Goldstein summed it up by saying broadcasters "are getting hurt because we are still in our own little box."